PM insists Finance Minister Kittiratt stay on as economic chief

BANGKOK, Feb 5 – Prime Minister Yingluck Shinawatra stood firm today that her deputy Kittiratt Na-Ranong must remain head of the government’s economic team despite a hiccup regarding two state-operated commercial banks and the rocketing inflow of foreign capital into Thailand.

She made the statement in response to a question by reporters on whether Mr Kittiratt, deputy prime minister and finance minister, will be ousted from the government’s economic think tank in an imminent cabinet reshuffle given the problem of escalating non-performing loans (NPL) at the SME Bank and the Islamic Bank of Thailand (IBank). Both banks were instructed to submit their rehabilitation plans to the Finance Ministry.

Mr Kittiratt said a resolution of their NPLs will not be reached soon as the Finance Ministry must study guidelines on solutions to the problem as recommended by the World Bank.

He admitted that he was concerned with the loan defaults of the two banks but said there are several alternatives in solving the problem including capital increase and separation of non-performing and performing loans so that management of the performing loans continues.

Merging with other state-run banks such as the Government Savings Bank needs further discussion but a conclusion will not be reached soon, he said.

Mr Kittiratt said his recent letter to the Bank of Thailand’s Monetary Policy Committee (MPC) was merely an expression of concern over the country’s high interest rate, adding that he did it in his capacity as finance minister who is obliged by the law to supervise the central bank.

Ampon Kittiampon, an MPC member, said the finance minister’s signal for an adjustment of policy interest rate was not a pressure on the committee, adding that several elements must be taken into consideration in reducing the interest rate.